New Chip Credit Cards Putting Squeeze on Small Businesses

Credit Card Changes Q and A
NEW YORK — New credit and debit cards with computer chips are putting the squeeze on small businesses.

The cards being rolled out by banks and credit card companies are aimed at reducing fraud from counterfeit cards. As chip cards are phased in, magnetic stripe cards, which are easier for thieves to copy, will be phased out. Businesses of all sizes face an Oct. 1 deadline to get new card readers and software that can handle chips. Most estimates of transition costs for small companies vary from the low hundreds to tens of thousands of dollars due to the wide range of equipment used.

This is one of the biggest nightmares merchants are going to face.

If businesses don’t meet the deadline set by companies including MasterCard, Visa and American Express, they can be held liable for transactions made with phony chip cards.

The switch to new chips in credit and debit cards poses a threat for small companies because they can’t get the volume discounts on the new equipment that big retailers get. And they don’t have in-house tech experts to install the new systems.

“This is one of the biggest nightmares merchants are going to face,” says Michael Kleinman, owner of Mason Eyewear, a store in Brickell, Florida, and Centurion Payment Services, a company that processes credit and debit card payments.

Tip of the Iceberg

The card readers shoppers see are just one part of a payment processing system. They’re connected to software in a merchant’s computer system that receives the transaction information and sends it to a payment processor. The processor then posts a charge or debit to the cardholder’s account and a credit to the merchant’s account.

The simplest card readers used in stores and other small businesses are likely to cost at least $100. The machines will also read magnetic stripes and some also handle what are known as contactless payments made with services like Apple Pay or Google Wallet. Most software prices start at several hundred dollars, but can run into the thousands for more complex systems. Many companies have computer systems that do more than handle payments — they also manage inventory and customer and vendor information. Businesses like restaurants and those with multiple locations are likely to have the most complex systems and the highest expenses.

Dickie Brennan & Co., which operates four New Orleans restaurants, expects to pay more than $25,000 to replace card readers and software, says Derek Nettles, the company’s information technology director. The company won’t raise its prices to pay for the switch; instead, it’s delaying an upgrade of its security camera system.

“We’re not happy about the additional expense,” Nettles says.

It’s Not Plug and Play

Changing card readers and software isn’t something many small business owners, even tech-savvy ones, will be able to do on their own. They’ll need to hire technology consultants who can charge as much as $100 an hour or more to install the system and ensure it works.

Even with Kleinman’s expertise in payment processing as owner of Centurion Payment Services, it took him five hours to install two card readers and software. And he was on the phone getting technical support from his vendor while he did it. Although the new system works, there are glitches that keep him tinkering. For example, sometimes the system has trouble accepting certain cards.

“Most people are definitely going to need to hire somebody to do it,” Kleinman says.

It may make sense for companies with combined payment, inventory and other systems to separate the payment part to make them less vulnerable to hackers, says Scott Shedd, a technology consultant with WGM Associates in Scottsdale, Arizona.

But that will add more costs, says Avivah Litan, an analyst with Gartner Research.

“If you want to use this opportunity to secure your systems, it could cost you thousands,” she says.

Asda scales back Black Friday sales after 2014 chaos

Shopper with Asda basket walking past cartons of milk
Asda, which is owned by US group Walmart, was one of the first British retailers to embrace the discount day. Photograph: Neil Hall/Reuters

Asda is understood to be planning to scale back its plans for Black Friday later this month after the promotional frenzy in its stores last year failed to deliver profitable sales.

In 2014, the retailer attracted negative publicity after camera crews invited to its Wembley store filmed shoppers fighting over discounted TVs. Queues of shoppers formed outside the doors and snapped up bargains on toys and electronics but many didn’t stick around to buy groceries.

As a result, sources said the Walmart-owned supermarket – which was one of the first British retailers to embrace the US-inspired discount day at the beginning of the Christmas season – was set on a very different approach this year.

Trade journal Retail Week reported that Asda might consider online-only deals or spread offers over several days to prevent a chaotic rush of shoppers in its stores.

By mid-afternoon last Black Friday, Asda said it had rung up 2m sales since 8am, making it the busiest single trading day of the year so far. It sold more than 8,000 TVs in the first hour, and more than 10,000 tablets in the first two hours.

But one source said: “Last year big-ticket items sold at a loss and attempts to ensure safety by forcing shoppers to queue for items meant food sales tanked.”

A crowd of people fight over a giant TV

Another source said Asda wanted to find a less costly way to handle the day. Last year the business had to draft in 2,000 extra staff, including security guards, to help manage the sale.

“It will be a totally different proposition this year,” another source said.

Asda and its fellow US-owned retailer Amazon have driven the rise of Black Friday, which has brought about a dramatic change in the way people do their Christmas shopping in the UK. The event, which falls on 27 November this year, has led to heavy discounting on electronic and electrical goods at a peak sales time when retailers traditionally raked in strong profits. Last year fashion retailers and department stores were drawn into the fray.

Police were called to a number of Tesco stores amid late night disturbances as shoppers tried to snap up bargains, while the websites of several big retailers including Currys and Marks & Spencer struggled to cope with demand.

Consultancy Salmon has forecast that Black Friday 2015 will become the UK’s first £1bn online shopping day, but many retailers are unsure how shoppers will react to Black Friday this year. Last month Home Retail Group, the owner of Argos, warned that its profits might take a hit after it spent millions on advertising and brought in new vans to handle deliveries on the day but admitted it was unsure about the level of sales that might emerge.

John Lewis boss Andy Street predicted Black Friday sales would be 20% higher this year than in 2014. But he has also warned fellow retailers to rein in Black Friday promotions after heavy demand over the promotional weekend caused havoc on the high street in the run-up to Christmas and hit profitability.

will Kanye West bring Adidas back into fashion?

Kanye West

Kanye West has many fans, but Herbert Hainer is clearly not among them. Asked which of the American rapper’s songs he likes most during an earnings call on Thursday, the chief executive of German sportswear company Adidas laughed. “I guess I’m too old to follow Kanye’s music.” Hainer and his business will be hoping that Adidas customers are more switched on.

Next week, the latest trainer from the collaboration between the pop star and Adidas, launched under the “Yeezy” range, hits stores. If the buzz on Twitter and Instagram is to be believed, the release of a new Yeezy Boost 350 is much anticipated.

One of Kanye West’s 'Yeezy' shoes released earlier this year.

Adidas is also hoping that its fiercest competitor takes note. The collaboration with the rapper is Adidas’s latest attempt to gain ground in its ongoing rivalry with Nike. Although the company with the three distinctive stripes presented solid third-quarter growth figures on Thursday, with sales up 13% to €4.8bn (£3.4bn) and net income up 10% to €311m, it is still struggling to catch up with its old enemy.

Last year, Nike’s revenues rose 10% to $30.6bn (£20bn). Adidas, meanwhile, reported 2% growth on revenues of €14.5bn for 2014. The gap gets even bigger once company targets are factored in: Nike recently set its revenue target for the year 2020 at $50bn. Adidas’s aim for the same date is less than half that, at €22bn.

Much of this disparity is due to the role of the US market in global sportswear, and the relative positions of Nike and Adidas within it. The country, where Nike was founded in 1964, accounted for $96.5bn of the industry’s total revenue of $268bn last year, according to research firm Euromonitor International. Western Europe, the home turf of Adidas, was worth only $56bn.

North America is not only the biggest market in terms of revenue. “It still defines what’s cool in sportswear”, says Christoph Metzelder, the former German football star and now managing director of sports marketing firm Jung von Matt/sports in Hamburg. Coolness, however, has not been a key asset for Adidas in its battle with Nike until now.

Adidas has focused on the functionality of its shoes as its main selling point. This has been the case since the company’s founder, Adi Dassler, invented a football boot with removable studs, whose suitability in all weather conditions made it an unlikely hero of the West Germany football team that won the 1954 World Cup in the “Miracle of Bern”. Until the late 1970s that worked quite well and Adidas dominated the market. But then came Nike.

Nike’s co-founder, Phil Knight, chose a different approach. When he brought in American basketball star Michael Jordan as the brand’s face in 1985, he hit a nerve. The “Air Jordan” has been lauded as the most famous sneaker ever since.

Nike’s first Air Jordan, released 1985.

In 2005, Adidas tried to catch up by acquiring its US competitor Reebok.Hainer, who has led Adidas since 2001, called the $3.8bn deal “a once-in-a-lifetime opportunity”. But it has not paid off so far. Last year, Adidas dropped to the No 3 rank in North America for the first time, falling behind newcomer Under Armour.

But Adidas is far from giving up. Last year, the company promoted two Americans to top management roles. Mark King, who previously ran the golf division TaylorMade, is now overseeing the North America business, while Eric Liedtke is taking care of the group’s brands. Adidas has also hired three of Nike’s top designers to join its newly established design studio in Brooklyn – a more trendy workplace than the company’s headquarters in the rural Bavarian town of Herzogenaurach.

Adidas headquarters in Herzogenaurach. The campus also has a running track.

Finally the company signed Kanye West, who previously was Nike’s brand ambassador. In Thursday’s earnings call Hainer did not want to comment on how much Adidas pays for the rapper’s commitment. Analysts estimate it to be a multi-million dollar investment. West himself said earlier this year that Nike has offered him $4m per year to stay, but had disappointed him by failing to offer royalties. Adidas spends more than 13% of annual sales on marketing, which is above the industry average of around 10%.

Despite the frenzy among Kanye fans whenever a new “Yeezy” goes on sale, industry experts are doubtful about the size of the benefit it brings to Adidas. “Such collaborations will continue to help the company’s brands bolster sales in the short term, but they are unlikely to provide a significant boost to long term revenues”, says Natasha Cazin, analyst at Euromonitor International.

Stars come and go, and so do customers and their fashion preferences. “Young consumers are not as loyal as their older counterparts, they switch brands quite often”, says Metzelder. Brands can soon be forgotten, he adds. “Who would have thought that a brand like Nokia could disappear?”

While Adidas is pushing for greater success in the US, Nike is making gains in the core business of its German rival: football. Although Adidas is official partner of the German football federation DFB until 2018 and and Fifa until 2030, some domestic stars do not feel a patriotic pull when it comes to footwear. In the World Cup final last year, Germany’s Mario Götze scored the winning goal in a pair of neon yellow Nike boots.

Mario Götze during the 2014 Fifa World Cup final - wearing Nike shoes.

Recently, Adidas’s American rivals have targeted a long-time neglected customer group in the sportswear market: women. Nike has started a womenswear collaboration with Sacai, a Japanese label overseen by former Comme des Garçons designer Chitose Abe. Under Armour has also signed supermodel Gisele Bündchen for an advertising campaign.

Next year the marketing battlefield will move south, from the US to Brazil for the Olympic Games in Rio de Janeiro. Unlike in the London and Beijing games, Adidas is not an official sponsor – this time it is Nike’s turn. “We decided to use the money otherwise,” Hainer said. For Adidas, the hope is that Kanye will make a significant contribution to the fightback.

an election on a flimsy platform

St Paul's Cathedral
The toppling of Electra Private Equity’s management has not shown the City in its best light. Photograph: Dan Chung for the Guardian

Electra Private Equity is an investment trust you wish you’d put a few quid into a long time ago. Even if you had bought just before the financial crisis in 2008, you would have doubled your money by now. And if you had the sense to back the trust the following year, at the bottom of the market, you would have enjoyed a ride from £7 to £36 a share.

Electra, in other words, is not obviously in need of a shakeup led by an activist investor. Yet that prospect is now in view. Edward Bramson from Sherborne Partners succeeded in getting himself and a sidekick voted on to Electra’s board on Thursday. He failed a year ago, when he owned 20%. Now, armed with almost 30%, he has managed to crawl over the line.

Indeed, the narrowness of Bramson’s victory is striking. Of 16.6m votes cast in his favour, he controls 10.7m, and co-investors in his Sherborne fund (notably Aviva Investors and Fidelity) have 4m. That leaves about 2m floating voters who thought Bramson was just what Electra needed. By contrast, some 14.4m votes backed the board, in effect endorsing chairman Roger Yates’s view that Bramson made “ill-judged, ill-informed and ill-founded” claims about Electra’s business.

Yates resigned on the spot after the vote, which was the correct course, since the two men clearly couldn’t coexist in the same boardroom, but he was right in his assessment of the raider. A year ago Bramson claimed there was £1bn of hidden value to be unlocked at Electra, but offered no evidence to support the boast. This time he mostly grumbled about the supposed lack of independence of Electra’s board, and its relationship with Electra Partners, the firm that manages the funds. But again, the arguments were unclear and his data unconvincing.

The suspicion is that Bramson’s real aim is to gain back-door control of Electra without paying a takeover premium. Hold on, the Sherborne camp would argue: his interests are directly aligned with other shareholders’. In theory, yes; in practice, one doubts it.

Investment trusts work best when there are clear lines of responsibility – a board appoints a manager of the funds and then holds that manager accountable. Bramson’s past remarks suggest he wants to meddle in that relationship by making day-to-day decisions about how portfolio companies should be managed. That might produce a quick gain or two, and the fizz of superficial success; but, over time, Electra would become a different beast, less able to stick to its long-term path.

Bramson has only two boardroom seats out of eight, so won’t necessarily have everything his own way, but momentum is on his side. Good luck, Kate Barker, the new chair, in keeping the peace; it looks an impossible task, especially when two supposedly reputable City investment houses like Aviva and Fidelity are prepared to swallow a prospectus as thin as Bramson’s. Activism is a fine thing when it’s done well, but Electra was the wrong target. A grubby day for the City.

A mistimed transformation

The curse of the “transformational” deal strikes again. It was only in February last year that Amec unveiled its £1.85bn purchase of Foster Wheeler, marrying its engineering operation, servicing oil and gas explorers and producers, with a company plying its trade towards the refinery end of the industry. The dreaded transformative label was applied by chief executive Samir Brikho to describe the wonders the takeover would bring.

Some 12 months after completion, Amec’s share price has halved, and now the dividend is going the same way. It’s being chopped in half to save £85m, a decision the City had failed to see coming – hence the 23% plunge in the share price on Thursday.

Shareholders clearly placed too much faith in Amec’s previous confidence in managing its way through a “lower for longer” period for the oil price. Ian McHoul, Amec’s finance director, now says customers talk of “lower for even longer” and put even more pressure on contractors. The dividend must join the list of savings Amec is trying to make.

By way of defence, the company could argue that the heaviest pressure is being felt upstream, where old Amec is concentrated, rather than in Foster Wheeler’s activities. In that sense, the new arrival has added defensive qualities. But that’s too charitable. The takeover – funded half in shares and half in cash – also saddled Amec with debts of £1bn. Foster Wheeler may have been the right target, but the timing and price were horrible.

Freshfields, the panel and the party

You know Freshfields – splendid legal chaps, members of the lawyers’ Magic Circle. Well, Freshfields, or Freshfields Bruckhaus Deringer in full, now has another distinction: it is the first legal firm to receive a censure from the Takeover Panel, a body that has existed for 47 years.

The breach of the rules may not sound serious outside the Square Mile. Freshfields, plus investment bank Credit Suisse, failed to consult the panel about the existence of a concert party, or relationship between two parties. JP Morgan got a milder telling-off.

The details of the tale need not detain us (they relate to the formation of Bumi, a Nat Rothschild mining venture shambles, via two acquisitions in Indonesia in 2011). But this may be an occasion when censure works better than a regulatory fine. Freshfields and the others must wear their rarely imposed badges of dishonour – and the time it took the panel to reach its conclusions suggests the offenders fought this ruling every step of the way.

Britain’s latest industrial figures give chancellor a boost

George Osborne will be buoyed by the latest economic data.
George Osborne will be buoyed by the latest economic data. Photograph: Action Press/Rex Shutterstock

George Osborne has received some good news before this month’s autumn statement on the economy, with data showing output from Britain’s factories has risen and the trade gap with the rest of the world has narrowed.

Figures from the Office for National Statistics showed manufacturing output increased by 0.8% between August and September – the biggest monthly jump in more than a year. Meanwhile, higher exports and falling imports meant the UK’s trade deficit more than halved in September – falling from £3bn to £1.4bn.

Data for the third quarter of 2015 – a more reliable guide to trends than one month’s figures – provided a less upbeat picture of the economy. Manufacturing output was down 0.4% on the second quarter, leaving the sector in technical recession, while the deficit in goods and services widened from £5.1bn to £8.5bn.

Despite the September increase in factory output, manufacturing production remains more than 6% below the peak it reached in 2008, before the economy’s descent into its most severe postwar recession.

Industrial production – comprising manufacturing, mining and quarrying, North Sea output and energy supply – increased by 0.2% in the third quarter, compared with the 0.3% the ONS had pencilled in when estimating the economy’s 0.5% growth rate for the third quarter.

The ONS said a near 5% drop in mining and quarrying meant industrial production fell by 0.2% in September, and in the third quarter it was more than 9% down on its pre-recession high.

Over the three months to September, there was evidence of a strong pound and a weakening in global demand making life difficult for British companies to sell abroad. Exports declined by 6%, widening the deficit in goods by almost £6bn to just over £32bn.

Eurostar sold off despite ministers believing its value would rise

A Eurostar train at St Pancras station
A Eurostar train at St Pancras station in London. The NAO said it regarded the sale process as effective and value for money. Photograph: Alamy

Britain’s stake in Eurostar was sold for £757m even though the government believed its value would rise, because ministers wanted to offload the state’s share in the cross-Channel train service before the general election, a report has concluded.

The report by the National Audit Office into the sale, published on Friday, found that taxpayers had invested four times more in Eurostar, approximately £3bn, than the sum recouped from the sale in March.

Dividend payments to the government over the next 10 years were forecast to exceed £700m, almost matching the amount paid for Britain’s 40% Eurostar stake and preference share.

The NAO said it regarded the sale process as effective and “value for money”, but the chair of the public accounts committee accused ministers of pursuing short-term cash rather than long-term value.

The government put Britain’s stake in Eurostar, which it had owned jointly with the French and Belgian governments since services began in 1994, up for sale last autumn. George Osborne described the eventual sale as a “fantastic deal for UK taxpayers that exceeds expectations”.

But the NAO report showed that Eurostar’s profits were forecast to increase significantly from 2016, when new, higher-capacity trains will be brought into service. Although the government thought higher profits could increase the price tag, it decided to sell to avoid uncertainty and risks. However, the timing was “primarily driven by the desire to sell prior to the 2015 general election”, said the NAO.

Amyas Morse, the auditor general of the NAO, said: “The government prepared well for the sale of Eurostar and the sale process was run effectively. I regard the sale as value for money.”

But he said there were lessons for the government as it starts to sell off £62bn of national assets, including the need for a detailed business case and to get objective and robust valuations from advisers. The NAO said paid consultants were shown other valuations before carrying out supposedly independent assessments of Eurostar.

A Treasury spokesperson said the NAO had confirmed that the sale delivered a good deal for British taxpayers with a process that was well run and effective. “Getting the best value for money for the taxpayer and tackling our country’s debts so our country lives within its means are key parts of our long-term plan, and as this report shows, the government is delivering on these objectives,” they said.

Meg Hillier, the Labour MP and chair of the public accounts committee, said: “The government’s focus in selling its stake in Eurostar appears to have been on short-term cash rather than long-term value for taxpayers. Once sold, the family silver can’t be bought back.”

Labour said the NAO report showed the public purse had “suffered a considerable net loss”. Lilian Greenwood, the shadow transport secretary, said it was unacceptable the decision to sell was driven by the election and that taxpayers would never recoup their £3bn investment. “Just like with East Coast, the privatisation of a successful publicly owned rail operator was prioritised. We need a new approach to the railways which puts passengers first, and leaves the Tories’ ideological opposition to public ownership behind,” she said.

Mick Cash, the general secretary of the RMT said: “However you dress it up, the fire sale of the UK’s Eurostar stake before the election has cost the taxpayer billions in wasted investment and lost future profits.”

The public accounts committee will hold a hearing into the sale later this month.

Two former Rabobank traders convicted in US Libor rigging trial

Former Rabobank employee Anthony Allen.
Former Rabobank employee Anthony Allen. Photograph: Brendan Mcdermid/Reuters

Two British citizens face lengthy prison sentences in the US after being convicted of fixing the Libor interest rate in the first case of its kind to reach a courtroom across the Atlantic. The two former traders at the Dutch Rabobank, Anthony Allen, Rabobank’s former global head of liquidity and finance, and Anthony Conti, a former senior trader, both intend to appeal against the verdicts reached by a federal jury in Manhattan.

The US justice department said the verdicts showed that the authorities were determined to crack down on financial crime. “Today’s verdicts illustrate the department’s successful efforts to hold accountable bank executives responsible for this global fraud scheme,” said Leslie Caldwell, head of the Justice Department’s criminal division.

Allen, 44, slumped over a table in court as the jury foreman read out the verdict. Conti, 46, held his head up. Lawyers for both men said they planned to appeal. “This is just round one,” Michael Schachter, Allen’s lawyer, said. “Tony Allen looks forward to pursuing all available options. He is disappointed with the verdict.” They will be sentenced next March and were not remanded in custody.

Of 13 people charged by the Justice Department with offences related to Libor rigging, seven are former Rabobank traders, including Allen and Conti, who earlier this year waived their right to extradition to fight the charges.

Prosecutors said Allen and Conti participated in a five-year conspiracy at Rabobank to rig Libor rates in dollar and yen. They relied on testimony from three former Rabobank traders who pleaded guilty as part of cooperation deals, as well as emails and instant messages that were sent at the time.

Prosecutor Brian Young had cited several emails as “rock solid evidence” and said the pair had left a “left a paper trail a mile long”. He had told jurors that the two British citizens were “active and enthusiastic participants” in a conspiracy at Rabobank to rig Libor rates.

Lawyers for Allen and Conti argued that while others at the bank may have been trying to rig Libor, their clients had submitted honest rate estimates. They argued that prosecutors took documents out of context and that cooperating witnesses lied about their clients’ role in the scheme in the hope of getting lenient sentences.

Allen opted to testify in his own defence, telling jurors he rarely was involved personally in submitting numbers used to calculate Libor and that in those few instances, he ignored traders’ requests to bias the rate. Schachter had argued that the prosecution case against his client boiled down to just 12 emails and instant messages over four years.

Schachter had told the court: “This is the kind of case that, the more you look, the more you dig in, the more the prosecution’s case falls apart. The pieces here don’t fit together because Tony Allen is not guilty.”

Aaron Williamson, Conti’s lawyer, had said: “Tony never let a trader’s request influence him to make a fraudulent Libor submission.”

In the UK, a former trader at the Swiss bank UBS, Tom Hayes, is serving 14 years in jail after being convicted of rigging Libor by jury earlier this year.

The trials followed a string of regulatory fines on banks, starting with Barclays, which was fined £290m in June 2012 by authorities on both sides of the Atlantic. The fine sparked a public outcry and led to the creation of the parliamentary commission on banking standards, chaired by Conservative MP Andrew Tyrie, which set out a series of measures to tighten up ethics in the City.

Rabobank was fined £662m by regulators in October 2013 over the Libor scandal, sparking a move by the bank’s chairman, Piet Moerland, to step aside earlier than he had planned. The UK regulator, the Financial Conduct Authority, levied £105m of the total.

In total, some 22 people in the US and UK have been charged, and a series of trials are already under way. US prosecutors have also brought charges against two other Rabobank traders.

Tata Steel slashes value of UK business by £862m

Tata Steel’s Scunthorpe site
Tata said its UK business had buckled under the weight of challenges including the dumping of cheap steel on to the market by China. Photograph: Anna Gowthorpe/PA

Tata Steel has slashed the value of its struggling UK business by £862m, weeks after unveiling plans to make 1,200 workers redundant.

However, the company – whose offer of £3m to help sacked steelworkers in Scunthorpe has been described by unions as “woefully inadequate” – also reported a pre-tax profit of £302m on Thursday for the three months to the end of September.

Tata Steel, owned by the giant Indian conglomerate Tata, made an underlying loss of £24m in Europe, but this was more than offset by a £475m underlying profit in India, boosted by £280m of asset sales.

Cheap Chinese steel imports have forced down the price of European hot rolled coil – a bellwether of the region’s industry. The price has slumped from €417.50 (£298) per tonne this time last year to €335 per tonne, a fall of nearly 20%, according to Steelfirst.com.

Tata said its UK business had buckled under the weight of challenges including the dumping of cheap steel on to the market by China. It said British steelmaking was facing a “structurally challenging environment of weak domestic manufacturing demand, surging imports, a strong pound and steep regulatory and business costs”.

Industry sources said the £862m writedown, the third in as many years, meant the UK business of Tata Steel was practically worthless for accounting purposes.

Its chief executive, Karl-Ulrich Köhler, called on the government to do more to prevent “dumped imports, including from countries that subsidise their steelmakers”.

Gareth Stace, director of the industry trade body UK Steel, urged the government to speed up efforts to pull the sector back from the brink.

“Conditions in the steel sector remain perilous with a perfect storm of high energy costs, a strong currency and unfair trade,” he said. “Measures have been promised to provide the sector with breathing space through the current crisis, but we need these within weeks, not months, if we are to give companies a fighting chance on a level playing field.”

The twin pleas to politicians come before an emergency meeting of European Union ministers to be held on Monday to discuss the steel crisis.

The business minister Sajid Javid, who will represent the UK at the summit in Brussels, said he was determined that the meeting should lead “to swift action, not just [be] a talking shop”.

Steel industry figures have called on the government to ease the burden on British steelmakers by lowering business rates and addressing energy costs, both of which are far higher than in other major European economies.

The small-business minister, Anna Soubry, hinted last week that the government planned to address those issues to prevent further job losses.

But the industry is also feeling the effect of the strong pound and a huge increase in cheap steel coming from China, where heavily subsidised companies are dumping their product in Europe at bargain basement prices amid falling domestic demand.

Chinese steel imports from January to June this year were 125% higher than for the same period in 2012, while China now supplies nearly a third of all European steel imports.

Measures to shore up European steelmakers against the flood of Chinese steel are likely to dominate the talks in Brussels, amid suggestions that countries such as the US are doing more to protect their industries.

The long-term malaise affecting the industry has seen Tata Steel write down the value of its UK business three times since it bought Corus – including the remnants of British Steel – for £4.3bn in 2007.

The company failed in a bid to sell its Long Products unit to US firm Klesch Group earlier this year after its billionaire head, Gary Klesch, walked away, blaming the UK government’s failure to deal with high energy costs and Chinese steel imports.

The Unite union is in the midst of a 45-day consultation process aimed at reducing Tata Steel’s 1,200 planned job losses, affecting plants in Scunthorpe and Lanarkshire.

“We’re getting into the nitty gritty of those discussions and will be coming forward with alternatives,” said a spokesman.

“It needs action from the government but it also needs the company to hold its nerve. The danger is that you get rid of valuable skills and expertise.”

Tata, which also owns Jaguar Land Rover, has pledged to provide £3m to help workers and business affected by around 900 job losses in Scunthorpe. The government said it would provide an additional £6m.

But the total sum of £9m has been described as “woefully inadequate” by Unite’s assistant general secretary Tony Burke.

AstraZeneca agrees $2.7bn deal for US biotech firm ZS Pharma

AstraZeneca has made a number of acquisitions

AstraZeneca has agreed to buy ZS Pharma, the US biotech company, for $2.7bn (£1.8bn) in cash, thwarting the ambitions of a Swiss rival in the deal-hungry pharmaceutical sector.

Britain’s second biggest drugs company followed Thursday’s upbeat annual results by announcing a $90 a share deal to snap up ZS Pharma’s technology to develop treatments for hyperkalemia, or high potassium levels. The condition can result in chronic kidney disease or chronic heart failure.

ZS Pharma’s ZS-9 treatment is under review by the US Food and Drug Administration and could produce sales of more than $1bn a year if approved, AstraZeneca said. The tasteless crystals, mixed with water and taken orally, absorb potassium rapidly and flush it out through the digestive system.

Actelion of Switzerland said in September it had started talks with ZS Pharma, based in San Mateo, California, that could have led to a bid. The US company has about 200 employees across three sites in California, Texas and Colorado.

Pascal Soriot, AstraZeneca’s chief executive, said: “Hyperkalemia can be a life-threatening condition for patients with chronic kidney disease and chronic heart failure. However, the risk is underappreciated and prevalence is increasing.

“This acquisition complements our strategic focus on cardiovascular and metabolic disease by adding a potential best in class treatment to our portfolio of innovative medicines.”

The acquisition is part of a deal frenzy sweeping the pharmaceutical sector as companies look to cut costs and buy new treatments to replace ageing drugs whose patents are expiring.

AstraZeneca has made a number of acquisitions to gain specific products and was the subject of a failed £70bn takeover approach by the US company Pfizer last year. Pfizer is in talks with Allergan, the maker of Botox, to form the world’s biggest healthcare business. Dublin-based drug firm Shire has been linked with a number of potential takeovers, including of Radius Health in the US.

Nearly 157,000 had data breached in TalkTalk cyber-attack

TalkTalk has given numbers of how many people had personal information stolen.
TalkTalk has given numbers of how many people had personal information stolen. Photograph: John Stillwell/PA

Almost 157,000 TalkTalk customers had their personal details hacked in last month’s cyber-attack on the telecoms company.

Talk Talk said the total number of customers affected by the attack two weeks ago was 156,959, including 15,656 whose bank account numbers and sort codes were hacked.

The total is 4% of TalkTalk’s 4 million customers and is a small fraction of the number feared when news of the attack broke. The number of customers whose bank details were stolen is lower than an estimate of less than 21,000 released a week ago.

The company said 28,000 credit and debit card numbers, with some digits obscured, stolen by the hackers cannot be used for payment and customers cannot be identified from the data.

TalkTalk said it had worked to establish how much personal data had been stolen in the hacking attack on 21 October and that it was now able to publish definite numbers. It advised customers to be on guard against scam emails and phone calls and said the stolen information on its own could not lead to financial loss.

When the cyber-attack was revealed, TalkTalk said it did not know how many customers were affected, raising concerns that hundreds of thousands of customers could be at risk. The company was criticised for its lack of information and for failing to to take precautions after being hacked twice before this year.

TalkTalk said: “Our ongoing forensic analysis of the site confirms that the scale of the attack was much more limited than initially suspected. It was a difficult decision to notify all our customers of the risk before we could establish the real extent of any data loss. We believe we had a responsibility to warn customers ahead of having the clarity we are finally able to give today.”

Two teenage boys have been arrested and bailed in connection with the cyber-attack – a 16-year-old from west London and a 15-year-old from County Antrim, Northern Ireland. TalkTalk said the company and the Metropolitan police were continuing their investigations.

TalkTalk said it would not contact customers about the hacking incident and ask for bank details or other personal or financial information.